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Sea Dragon Energy announces third quarter 2012 results

Tuesday, November 27, 2012 9:25 AM

CALGARY, Nov. 27, 2012 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (TSXV: SDX) is pleased to announce its 2012 third quarter financial and operating results (the "Quarter").   All dollar values are expressed in United States dollars unless otherwise stated.


  • Achieved an average production rate of 1,149 bopd as compared to 1,066 bopd in the third quarter of 2011;
  • Funds flow from operations for the Quarter was $1.0 million compared to $(0.2) million in the second quarter of 2012 and $2.2 million in the third quarter of 2011;
  • Reduced outstanding debt during the Quarter from $7.3 million to $3.0 million utilizing cash on hand.
  • Exited the Quarter with cash and cash equivalents of $5.4 million and working capital of $6.2 million, and $3.0 million of debt;
  • Generated netbacks of $40.24/bbl in the Quarter, compared to $39.25/bbl in the second quarter of 2012 and $53.93/bbl in the third quarter of 2011.
  • Operating costs for the Quarter were $9.13/bbl compared to $8.36/bbl in the second quarter of 2012 and $(1.62)/bbl in the third quarter of 2011.
  • Net loss for the Quarter was ($19.5) million compared to ($1.4) million in the second quarter of 2012 and $1.1 million in the third quarter of 2011, due primarily to the evaluation and exploration impairment of $19.2 million.
  • Subsequent to Quarter end the Company collected $2.2 million in outstanding accounts receivable.


The following table provides a summary of Sea Dragon's financial and operating results for the three and nine months ended September 30, 2012 and 2011 and the three months ended June 30, 2012. Consolidated financial statements with Management's Discussion and Analysis ("MD&A") are now available on the Company's website at www.seadragonenergy.com and on SEDAR at www.sedar.com.

Fiscal Year Prior Quarter (1) Three months ended September 30 Nine months ended September 30
    2012 2011 2012 2011
Financial $000's          
Cash, end of period 7,179 5,405 7,051 5,405 7,051
Working capital 7,197 6,194 14,290 6,194 14,290
Funds from operations (213) 965 2,158 1,149 5,116
  per share (0.00)  (0.00)   (0.00)   0.00  0.01
Net Income/(Loss) (1,377) (19,498) 1,143 (21,661) 1,552
  per share  (0.00)  (0.05)  (0.00)  (0.06)  0.00 
Capital expenditures 3,140 2,445 1,592 7,755 6,132
Total assets 78,604 54,885 88,310 54,885 88,310
Shareholders' equity 67,061 47,641 83,082 47,641 83,082
Common shares outstanding (000's) 376,459 376,459 376,459 376,459 376,459
Warrants outstanding (000's) 30,000 30,000 30,000 30,000 30,000
Oil sales (bbl/d) 1,147 1,149 1,066 1,105 1,112
Brent oil price ($/bbl) 108.44 109.28 113.35 112.03 111.92
Realized oil price ($/bbl) 103.90 105.33 108.44 107.83 106.63
Royalties ($/bbl) 56.29 55.96 56.13 57.17 54.98
Operating costs ($/bbl) 8.36 9.13 (1.62) 10.25 6.28
Netback ($/bbl) 39.25 40.24 53.93 40.41 45.37

 (1)  Denotes the three months June 30, 2012.


The NW Gemsa block is located in the Eastern Desert on the southwest part of the Gulf of Suez and comprises 4 fields: the Al Amir field (undeveloped heavy oil field), the Al Amir SE field, the Geyad field and the Al Ola field.  Current production from the concession is running steady at around 8900 bopd gross of light crude oil (42 API) (890 bopd net to the Company). Cumulative oil production is 9.74 MMbbl gross (8.12 MMbbl from Al Amir/Al Ola and 1.62 MMbbl from Geyad).  Sea Dragon has a 10% working interest in the Concession.

NW Gemsa is producing from the Shagar and Rahmi sands of the Kareem Formation.  Potential for additional oil has also been demonstrated in the Belayim, South Gharib, and Lower Rudeis Formations.

Al Amir SE and Al Ola Fields
Currently, 9 producers and 3 injectors are operating at Al Amir SE and Al Ola Fields. Water is being injected in Al Amir SE-7, Al Amir SE-8 and Al Amir SE-10 injectors at a rate of over 13,000 bwpd.

Al Ola-3 Well:
This injection well, located in the Al Ola development lease, was spud on July 16, 2012. The objective of the well is to provide injection support to the Kareem sands in the Al Ola area. The Shagar and Rahmi sands were cored and the well was successfully drilled to a total depth of 10,550 ft.

In November, this water injection well was dually completed in the Rahmi and Shagar sands. The well was perforated in the intervals: 10,232-10,252 feet and 10,164-10,182 feet and a final completion string was run.  Water injection is expected to commence shortly.

Al Amir SE-13 Well:
This development well was spud on October 14, 2012 with the objective of appraising the northern area of the field and successfully reached its total depth of 10,350 feet on November 7, 2012.  Log data indicated 20 feet of Shagar net pay with 12% porosity and low water saturation. This well was completed in the Shagar sands and placed on test at a rate of 800bopd gross.

Al Amir SE-7 Injector Work Over:
In October, operations were successfully conducted to recomplete this well as a dual zone water injector (Shagar and Rahmi zones).  The objective of the workover was to increase water injection into the Rahmi zone, where additional volumes are needed to maintain reservoir pressure, optimize production and maximize oil recovery.  This well is operating again and current injection rates are 1380  bwpd in the Rahmi and 2480 bwpd in the Shagar.

Geyad Field
Three wells currently produce from the Geyad field.  Water injection capability exists at Geyad-5 in both Shagar and Rahmi zones.

Geyad-6ST Well:
This development well was spud on September 10, 2012 with the objective of appraising the Kareem Shagar and Rahmi sands. The well was drilled to a total depth of 6,200 feet, however, it was subsequently sidetracked as the Shagar sands were found to be water bearing. The sidetrack was successfully drilled to a final depth of 6,350 feet, encountering seven feet of net pay in the Shagar sands.

In October, this well was completed in the interval 5,996 to 6,006 feet and tested at 1600bopd on a 24/64" choke size. This well is currently on production at 918 bopd with 18/64" choke.

Geyad-1x Well Work Over:
In October, this oil producer was re-completed in both the Rahmi and Shagar sands. Both intervals were re-perforated and a new completion string was run to allow commingled production. Cumulative oil production to date from this well is 764,000 bbl.

Geyad-2ST Work Over:
Operations are ongoing at this well with the purpose of recompleting in the Rahmi zone. This former Shagar producer experienced water problems due to an underlying aquifer and was shut-in late 2011. The Rahmi will be perforated in the interval 6,565-6,595 feet.

This concession is located onshore in the southern part of Egypt some 1,000 km south of Cairo. It contains the Al Baraka oilfield, producing light oil from multiple reservoirs and an exploration area of 11,400 km².  Sea Dragon has a 50% working interest in the Concession.

Production from the Al Baraka field is averaging approximately 520 bopd (260 bopd net to Sea Dragon).

Faris-1 Well
This second exploration commitment well, located 4.5 km south of Al Baraka oilfield was spud on June 26, 2012 and drilled to a total depth of 6,785 ft. The primary objective was to test the Kom Ombo Sands. The well encountered oil shows in both the Kom Ombo "C" and "A" sands, however it failed to produce oil on test and was subsequently plugged and abandoned.

Al Baraka 17 Well (AB-17)
The AB-17 well was successfully drilled to a total depth of 7,527 m in the Basement and logged.  Oil shows were encountered in the Six Hills D, Kom Ombo "C" and "A" sands.  Petrophysical analysis indicated the intervals are predominantly water bearing and the well was plugged and abandoned.

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the 2012 drilling and capital expenditure programs of the NW Gemsa and Kom Ombo Concessions and the results referenced or implied herein should be viewed as forward-looking statements.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements".  All reserves information contained herein as well as the net present value of such reserves should be considered as forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such risks and other factors include, among others, costs and timing of exploration and production development, availability of capital to fund exploration and development and political, social and other risks inherent in carrying on business in Egypt.  There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Corporation undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law. Although Sea Dragon has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Investors are cautioned that such forward-looking statements involve risks and uncertainties.  Actual results may differ materially from those currently anticipated.  See Sea Dragon's Annual Information Form for the year ended December 31, 2011 for a description of the risks and uncertainties associated with the Company's business, including its exploration activities. The forward-looking statements contained herein are expressly qualified by this cautionary statement.


SOURCE: Sea Dragon Energy Inc.

Said Arrata 
Chairman, CEO and Director 
(403) 457-5035 

Tony Anton
President, COO and Director
(403) 457-5035

Olivier Serra 
Chief Financial Officer and Director 
+331 5343 9442 

Brisco Capital Partners Corp.
Investor Relations
(403) 262-9888

(Source: CNW )
(Source: Quotemedia)


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